What is BBT.WA's Intrinsic value?

Boombit SA (BBT.WA) Intrinsic Value Analysis

Executive Summary

As of June 16, 2025, Boombit SA's estimated intrinsic value ranges from $2.52 to $10.45 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $10.45 +53.7%
Discounted Cash Flow (5Y) $10.40 +52.9%
Dividend Discount Model (Multi-Stage) $4.23 -37.8%
Dividend Discount Model (Stable) $3.11 -54.2%
Earnings Power Value $2.52 -62.9%

Is Boombit SA (BBT.WA) undervalued or overvalued?

With the current market price at $6.80, the stock appears to be fairly valued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Boombit SA's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 5.5% 6.0%
Equity market risk premium 6.3% 7.3%
Adjusted beta 0.55 0.82
Cost of equity 9.0% 12.5%
Cost of debt 6.1% 14.0%
Tax rate 19.6% 25.3%
Debt/Equity ratio 0 0
After-tax WACC 9.0% 12.5%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 10.7% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $225 (FY12-2024) to $354 (FY12-2034)
  • Net profit margin expansion from 2% to 2%
  • Capital expenditures maintained at approximately 9% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $10 $127M 59.7%
10-Year Growth $10 $128M 36.9%
5-Year EBITDA $12 $155M 66.9%
10-Year EBITDA $12 $153M 47.4%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 105.9%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.7%
  • Long-term growth rate: 0.5%
  • Fair value: $4.23 (-37.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 12.5% (Low) to 9.0% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $2 to $4
  • Selected fair value: $3.11 (-54.2% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $2M
Discount Rate (WACC) 12.5% - 9.0%
Enterprise Value $17M - $23M
Net Debt $(15)M
Equity Value $31M - $38M
Outstanding Shares 14M
Fair Value $2 - $3
Selected Fair Value $2.52

Key Financial Metrics

Metric Value
Market Capitalization $93M
Enterprise Value $78M
Trailing P/E 18.43
Forward P/E 16.71
Trailing EV/EBITDA 4.45
Current Dividend Yield 574.33%
Dividend Growth Rate (5Y) 48.16%
Debt-to-Equity Ratio 0.00

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $3.14
Discounted Cash Flow (5Y) 25% $2.60
Dividend Discount Model (Multi-Stage) 20% $0.85
Dividend Discount Model (Stable) 15% $0.47
Earnings Power Value 10% $0.25
Weighted Average 100% $7.30

Investment Conclusion

Based on our comprehensive valuation analysis, Boombit SA's weighted average intrinsic value is $7.30, which is approximately 7.3% above the current market price of $6.80.

Key investment considerations:

  • Strong projected earnings growth (2% to 2% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.00)
  • Historical dividend growth of 48.16%

Given these factors, we believe Boombit SA is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.